Boards & Shareholders

As I curl up with a mug of hot chocolate—OK, it’s a gin and tonic—and feel the warmth of the fire, I find myself in the holiday spirit. The kids’ gifts are ready, there’s a decent football game on television, and I’m mostly content. Mostly. Call it a personality defect: At times of tranquility, my […]

In 2006 three topics will dominate boardroom discussion: (a) executive compensation, (b) majority voting for election of directors and (c) the relative merits of short-term stock performance and long-term company value in the context of greatly increased pressure from activist shareholders. As a result of Delaware’s affirmation of the business judgment rule in the Disney […]

As the truism goes, where you stand on an issue often depends on where you sit. Unfortunately, your shareowners sit all over the place. Literally. And that has a major effect on how they view your company’s governance. Consider institutional investors based here in the U.S. (we’ll skip for now the cultural and regulatory differences […]

The American Bar Association’s Committee on Corporate Laws, which is studying possible revisions to the Model Business Corporation Act related to director elections, has delayed the release of its recommendations until February 2006. And though the group has been relatively quiet regarding its deliberations, in a brief report on its latest meeting the committee reiterated […]

Afederal appeals court has rebuked the Securities and Exchange Commission for imposing severe civil penalties under the Sarbanes-Oxley Act on a company’s directors for engaging in market manipulation and making false statements. The court said that the Commission failed to show that the directors’ conduct “created a significant risk of substantial loss to other persons,” […]

The New York Stock Exchange has filed a proposed rule change with the Securities and Exchange Commission that would modify some of its corporate governance requirements related to director independence. Experts say that, even if they aren’t implemented in time for the 2006 proxy season, NYSE-listed companies should look to the proposed rules for guidance. […]

It’s no secret that hedge fund activism is on the rise—stalwarts like McDonald’s, Time Warner and Circuit City have been targeted by activist funds in recent months. Now, for the first time, a report describes the types of companies most likely to be targeted by funds, and outlines steps for preempting the wrath of highly […]

Proxy advisory firm Institutional Shareholder Services has updated its U.S. and international 2006 proxy voting policies to include, among other things, a new policy on internal control reporting disclosures, performance tests for directors, and a recommendation for tally sheets for CEO pay. Rockville, Md.-based ISS said it completed its policy formation process earlier this year […]

With every passing week, the majority vote movement appears to gain momentum. In fact, nearly every few days, another company voluntarily joins the growing ranks of companies that have agreed to amend their corporate governance guidelines to stipulate that if the majority of votes cast are “withheld” for a director in an uncontested election, that […]

Based on the belief that environmental issues are no longer only of interest to those investors who participate in what is known as “socially responsible investing,” one investment consulting firm has begun rating investment managers’ practices on environmental, social and corporate governance issues. Specifically, Mercer Investment Consulting is rating managers on their voting and engagement […]